Changing markets

Toyota, seemingly unhurt from its 2009-2010 recall debacles, is still gaining US market share and pushing certain models to capture niche markets. As we talked about in class, they are exercising product differentiation and specialization to gain market share. Coupled with a low cost structure, their vehicles are appealing to the public and doing so at an increasing rate.

Especially in states with high fuel prices (California in this case), it is obvious that consumers are moving toward fuel-efficient hybrids and plug-ins. The Prius hybrid is now the top selling car in California! An interesting study will be whether or not the move for fuel efficiency will have similar effects all across the country or not. Also, for how long will Toyota have the superior (mpg, affordability, etc.) hybrid and control the market? If the 40k Chevy Volt is the Detroit 3’s only competitor, Toyota may own the hybrid market for a while.

http://www.bloomberg.com/news/2012-10-18/toyota-prius-dominates-california-as-state-s-no-1-model.html

 

 

4 thoughts on “Changing markets

  1. The large movement of consumers to the Prius appears to be largely a result of high gas prices, at least in California. This probably stems from a large number of consumers switching from SUV’s and trucks to cars with better MPG. However depending upon the reliability of the Prius, sales could slow down once consumers own either a Prius or similarly high MPG car. This would be similar to the self competition Ford faced in the early years of his production. The Prius could continue to grow in the market though if significant improvements are made to raise MPG and therefore save consumers more money in the long run.

  2. It certainly appears Toyota and Honda have seen the most gains in the market as of late. It makes you wonder whether times are so tough that people really aren’t factoring in American vs. foreign into their cost equation. In the past, it appears the Big 3 automakers had a major advantage in their marketing given they were made in the U.S. through the labor of American workers. The U.S. consumer has certainly been hit hard from the late 2000s recession, and it appears until unemployment drops significantly and incomes rise, price will be the number one determinant of whether or not someone buys a car (as most people would agree a Prius is not the most attractive car on the market). The cost structure question also arises when we think of how many cars these foreign firms can produce, and to keep their prices low and reach all the consumers they want, keeping their costs low has proven to benefit them as of late.

    • There in fact is very little evidence that people pay attention to origin of content or national identity; indeed, lots of people can’t identify which companies are “Japanese”. Nor has origin been a part of Detroit 3 advertising (in part because they sold imported vehicles, and not just those from within NAFTA). If anyone in class has taken a marketing class, we can get more info on how much people remember from ads…my sense is “very little”.

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